Electric utilities use a variety of tools to balance demand and supply and maintain frequency levels across the grid. To accomplish this task, they rely on provision of grid services from generation resources. The grid services include primary frequency control (usually provided through generation droop and natural frequency response of system load), secondary frequency control (also known as regulation or Automatic Generation Control (AGC)), and tertiary control (usually accomplished through economic dispatch). These different control categories are distinguished primarily by the required response characteristics of the underlying grid services. Primary frequency control is the fastest; it is initiated almost instantaneously in response to frequency changes. Regulation is next in time sequence; it is initiated by set points (or raise/lower signals) generated by AGC system, usually every few seconds. Tertiary control or economic dispatch is next in line; it is initiated usually every 5 minutes and generates base points (dispatch targets for load following and ramping operations). Generally, preceding these time frames, there is an operations planning stage where generation resources needed to provide these grid services are committed and scheduled to meet the anticipated operational requirements of each time frame.
The task of providing these grid services and planning for their provision while accounting for their interactions has been complicated by the proliferation of variable renewable generation technologies.
The proliferation of variable renewable generation technology available in current market systems create imbalanced variability and frequency deviations that are increasingly difficult to respond to. As a consequence, increasing the quality of frequency response, regulation, and balancing services is a motivating factor for market participants and important for efficient operation of overall electricity markets.
With the proliferation of variable generation utilities, Balancing Areas can no longer rely only on conventional generation sources and traditional methods to reliably and economically secure and deploy grid services. Moreover, proliferation of some types of renewable generation such as photovoltaic (PV) resources has resulted in reduced system inertia, further complicating the effectiveness of such traditional methods of utilizing grid services.